The industrial policy of 1977 announced by the Janata government led by Morarji Desai emphasized small-scale and cottage industries over large industries. It increased investment limits for tiny and ancillary units and focused on developing appropriate indigenous technologies. However, the policy was criticized for not fully supporting small-scale industries or enabling foreign collaboration and investment. It also restricted exports and industries in major cities. The policy lasted only three years before being replaced by a new Congress government in 1980 that pursued a different approach.

2. INDUSTRIAL POLICY 1977
• The industrial policy statement 1977 was announced by
Jannata Government led by Morarji Desai on 23 December
1977. This policy was later replaced by incumbent congress
Government in 1980.
• This was the first time when a non-congress government
was ruling dispensation at center. The Janata Government
had a different approach and planning philosopy from
congress, and it reflected in its industrial policy.

3. Meaning of Industrial policy: The industrial policy of a country is
its official strategic effort to encourage the development and
growth of part or all the manufacturing sector as well as other
sector of the economy. The government takes measures at
improving the competitiveness and capability of domestic firms
and promoting structural transformation.
• Industrial policy Dec 23, 1977 : Industrial policy, 1977
highlights on producing inputs needed by a large number
of small units and making adequate marketing
arrangements .To boost the development of small scale
industries, the investment limit in the case of tiny units
was enhanced to Rs.20 lakhs and of ancillaries to Rs.25
lakhs.

4. Silent features of Industrial policy,1977
• Emphasis on cottage and small scale industries.
• Development of appropriate technology.
• Role of large-scale industries.
• Role of public sector.
• Policy toward foreign capital.

5. LIMITATION
• The policy statement of 1977 can be said as old wine in new bottle. It
means that 1977 policy was just a mere continuation of 1956 policy.
• The policy of encouraging SSI was not carried out to the fullest extent but
on half hearted manner as only 807 items reserved for SSI out of 2000
articles.
• No radical changes were noticed in respect to foreign collaboration, MNC’s
and import of sophisticated techniques from abroad.
• It gave priority only on the small scale industries. Large industries were not
given much importance.
• This policy gave importance on Labour-intensive technology but not on
Capital intensive
• This policy restricted export .
• This policy restricted establishment of industries in the metropolitan cities.
• It restricted foreign investment in the Indian companies.

6. Advantage of Industrial policy,1977
• It gave emphasis on the development of small and cottage
industies.It was declared that whatever can be produced by
small and cottage industries must only be so produced
• It forced the large houses to relay on internally resource for
financing new or expanding existing project .
• Government decided to take the sick unit in the interest of
protecting the employment.
• This policy emphasized on special effort to develop small and
ordinary machines and their optimal use to enhance
productivity and income of the workers engaged in small and
collage industries.
• This policy help in the development of the indigenous
technology to be used for future development of the industry.

7. IMPACT ON THE ECONOMY
It does not have a much impact on economy because
the policy lasted only for three years. The new
government was formed on 1980 which changed the
policy. The approach of the new government in the
center was different, for that a new policy was made
on 1980 by the congress.

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